Dormant for years, the world’s greatest salsa label is back and celebrating its 50th anniversary. How a new digital strategy and smart branding have revitalized–and returned to profitability–this major cultural institution.

By David Peisner9 minute Read

Fania Records is frequently touted as the Motown of Latin music, but in some ways that undersells the story of the record label’s extraordinary rise, fall, disappearance, and eventual resurrection. Like Motown, Fania began as a tiny, hand-to-mouth operation, the handiwork of a Dominican bandleader named Johnny Pacheco and his Italian-American divorce lawyer, Jerry Masucci. The pair founded the label in 1964 in New York City, and began signing the city’s top Latin musicians, recording them, and selling the product of their endeavors from the trunk of a car. “I always wanted to have a group and work in a studio, so I came up with the idea with Jerry,” says Pacheco, now 79 and living in New Jersey. “I said, ‘I’ll take care of the music and you take care of the paperwork.’ We never thought it was going to get that big.”

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During a remarkable two-decade run, Fania was home to an impressive roster of major Latin-music artists, including Celia Cruz, Héctor Lavoe, Willie Colón, Eddie Palmieri, Ruben Bladés, Ismael Miranda, and Pacheco himself. The label played a huge part in spreading Latin music, particularly salsa, throughout Europe and Latin America. In the process, Fania became an iconic emblem of Latino culture. “It may not have been as successful as Motown in bringing the music to that wide of an audience, but Fania brought salsa to the general public,” says Andre Torres, founder and editor-in-chief of the record-collector-culture magazine Wax Poetics, who partnered with Fania on a series of reissues. “Within that community it’s still revered just as Motown is among old soul-heads.”

Now, as Fania celebrates its 50th anniversary this year with a series of concerts around New York City as part of the city’s SummerStage series, it’s in the midst of a radical reinvention: The label that once peddled its wares from the trunk of a car is now almost entirely digital, and recently introduced the first Latin music app on Spotify. But this isn’t a simple case of out with the old and in with the new. Fania’s challenge has been to find a way to honor its past without forsaking the future.

The Fania All-StarsWhen they started going through all of the old files, they discovered receipts for storage units in upstate New York. It was a long shot, but could there be something significant secretly packed away?

In many ways, the company’s adapt-or-die credo was borne out of necessity. In the early ’80s, Masucci–who’d bought out Pacheco’s share of the company around 1967 (Pacheco continued on as the label’s artistic director)–moved to Argentina, and Fania ceased recording and releasing new music. Masucci died in 1997, and for the next eight years Fania and all of its assets were tied up in probate court while various parties battled over its ownership. When Fania emerged from probate in 2005, a company called Emusica bought the label with financing from Morgan Stanley. Michael Rucker, who had a decade of experience in marketing and the music business for companies like the Jeffrey Group and Urbana Entertainment, was brought in as director of marketing to help revive the brand, which by that time had been mostly dormant for 20 years.

The first thing Rucker and the new ownership needed to do was figure out exactly what they’d just bought. After years of inattention and shoddy record keeping, Fania was, according to Rucker, “in complete disarray. The files were a mess,” he says. “When we acquired it, they told us they did not have any of the original multi-track recording tapes.” But when they started going through all of the old files, they discovered receipts for storage units in upstate New York. It was a long shot, but could there be something significant secretly packed away? “We sent someone up there to check it out,” says Rucker, “and that’s where we found the multi-tracks.”

Collecting and archiving Fania’s assets was no small undertaking. “We had massive teams, like 45 people, there for 60 days doing nothing but documenting and databasing every single asset, whether it be a master tape, a multi-track, a photograph, a contract,” says Rucker. “Because creatively, you can go many different places with a catalog this deep and rich, but you can’t go anyplace if you don’t know what you have.” In the end, the label discovered that it owned nearly 3,000 albums, not all of which had previously been released. Rucker says they found the master tapes for roughly 85% to 90% of them.

We found ways to reach markets we never would’ve thought about. We started finding there were dancers in France and Japan, enthusiasts in Mexico and other places like Croatia and Estonia, who we simply weren’t able to reach in the physical world because it’s so cost-prohibitive.

During Fania’s lean years from the mid-’80s to the mid-2000s, the label also neglected to collect many of the royalties and licensing payments it was due (or to pay them out to their artists), another problem the new ownership sought to correct. “The music business is often made up of collecting pennies and knowing where to collect pennies,” says Rucker. “If you don’t put the tools and team in place to go collect in those places, you’re leaving a lot of money on the table.”

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Once all of that was done, Fania spent 2006 and 2007 remastering and reissuing dozens of the label’s classic records, including Lavoe’s La Voz, Cruz and Pacheco’s Celia & Johnny, and Live at the Cheetah, a concert recording by the Fania All-Stars, a revolving collective of the label’s leading lights who often toured and recorded together. The market was primed: El Cantante, a biopic about the life of Lavoe starring Marc Anthony and Jennifer Lopez, was released in 2006, and CD sales hadn’t yet fallen off a cliff. “We did really well the first couple of years out,” says Rucker. “The Héctor Lavoe stuff around the movie, some pieces were selling upwards of 90,000 or 100,000.”

Fania’s return to prominence and the reissuing of so many long out-of-print albums was welcomed not only by fans but by many of the original musicians. “They sent me copies of the new stuff they were doing and it was very well presented,” says Pacheco. “They gave it a new look.”

But the good times didn’t last. “By 2008, we saw, just like everybody else did, the deep decline of the CD,” says Rucker. “Not just from consumers moving to digital but also by simply a lack of retail environment. That was the first throes of Walmart, Target, and Best Buy dramatically cutting their space allotted to music, and the final throes of music retailers like Virgin completely going out of business.” Fania also sold a lot of music in Puerto Rico, where the company that controlled the CD market there had significantly cut its buying.

Around this time in 2008, through a series of deals, Morgan Stanley essentially sold Fania to a new group of investors, Codigo Music. Rucker stayed on and helped chart a new course forward. Wax Poetics’ Torres began working with Codigo in late 2009, just after the company had acquired West Side Latino, another Latin music label that had been around since the 1940s. For Torres, the prospect of having both the Fania and West Side Latino catalogs at his disposal was enticing. “When you step back, you can see the evolution of Latin music from the mid-to-late ’40s all the way through the mid-to-late ’80s,” he says. “You’re talking four decades of Latin music. No one has been able to have this stuff under one umbrella and been able to pick across catalogs to tell this story.”

2013 was the label’s first profitable year since its resurrection. It racked up sales of roughly 250,000 albums, most of them downloads, and the move to digital has been so successful that Fania has almost eliminated physical product altogether.

While the music business slowly and grudgingly began migrating toward a digital model via iTunes, Amazon, and later streaming services like Spotify and Pandora, this change was particularly tricky for Fania, whose primary audience seemed to be older Latinos and passionate collectors, neither of whom were the most likely to embrace the new digital world. But Rucker quickly realized that in order to reach beyond that core audience, they had little choice. “We got moved into the digital space, I don’t want to say kicking and screaming, but we were moved much quicker than most labels were,” he says. But suddenly freed from the tyranny of having to manufacture and ship CDs around the world, the label saw its new focus on digital reaping immediate benefits. “We found ways to reach markets we never would’ve thought about. We started finding there were dancers in France and Japan, enthusiasts in Mexico and other places like Croatia and Estonia, who we simply weren’t able to reach in the physical world because it’s so cost-prohibitive.”

2013 was the label’s first profitable year since its resurrection. It racked up sales of roughly 250,000 albums, most of them downloads, and the move to digital has been so successful that Fania has almost eliminated physical product altogether. “There may be a time when we say, ‘Wow, let’s start reissuing or remastering vinyl,’ but we really love and embrace the digital space,” says Rucker.

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In the past few years, Fania has explored other ways of bringing new listeners into the fold, including the Spotify app, signing new artists, and opening up their archives to a series of DJs to create remix albums. Joe Claussell, a popular New York City DJ whose family hails from Puerto Rico, says he grew up on Fania artists like Pacheco, Lavoe, and Colon, and was initially reluctant to tinker with their classic tunes. “In general, I thought nothing should be touched,” he says. “But I understood that if we were going to try to not just preach to the converted but expose this music to a younger generation, we had to do something to achieve that goal.”

The 50th anniversary of the label’s founding has given Rucker and the Codigo team good cause to reflect on Fania’s rollercoaster journey. Besides launching a slate of 50th anniversary digital releases, the SummerStage Concert Series will feature Fania shows throughout the summer, including one by Claussell and salsa legend Ismael Miranda, and the final SummerStage show of the season, in Central Park, featuring a reconstituted version of the Fania All-Stars.

Ultimately, though, Rucker hopes the anniversary celebrations are less a dwelling on the past than a bridge to the future. “We are one of the few labels that was and continues to be a brand in and of itself,” says Rucker. “We have 600,000 Facebook followers tied to the brand, not a particular artist.” He says the label, like the rest of the music industry, is moving away from seeing music sales as its primary revenue generator, and in fact roughly 40% of Fania’s income is already coming from things like licensing deals and merch sales. “Our focus is, ‘How do we build a relationship with the consumer and monetize that?’” he says. “Does that come from a download, a stream, a T-shirt, a party, a skateboard? We don’t care.”